Yue Yuen Industrial (Holdings) Limited announced its total turnover rose 12.5% in its year ended September 30, to $4.11 billion. Sales to the U.S., Yue Yuen's largest market, grew 4%. Net profit increased 1.6% year on year to approximately $359.4 million.
The Group recorded steady growth in the footwear manufacturing operation, with turnover from athletic shoes and casual/outdoor shoes grew by 10.6% and 9.5% year-on-year respectively. There was significant growth in the total number of shoes produced, which at 232.2 million pairs represented a rise of 18.2% compared with the previous year.
The rate of growth was higher than the market average due to support of existing customers and the addition of new clients. During the year under review, the Group installed 25 new production lines, evenly spread among the three production bases (mainland China, Vietnam and Indonesia), taking the total number of lines to 398.
Steady growth in turnover was experienced in each geographical market, and distribution was more balanced among the three major markets the U.S., Asia and Europe. Turnover growth was particularly strong in the emerging market regions such as South America and Asia with surging retail sales in the greater China region driving the rise recorded in the latter.
Retail sales in the Greater China region surged 48.8% year-on-year to $488.4 million. This was due to the strong growth in the retail sales operation in mainland China and increased contributions from the wholesale operations in Taiwan and Hong Kong.
The total number of self-operated stores/counters in China under the Group stood at about 3,000 by the end of September 2007. In addition, there were about 2,600 distributors in the Greater China region for the Groups wholesales operations for the three licensee brands.
Although the manufacturing environment in the past year continued its down turn, the Group managed to maintain its growth and profit margins by leveraging on its economies of scale, improving efficiencies and expanding its retail operation.
Some associate companies, and especially jointly controlled entities, however, were unable to cope with the severe and challenging business environments. They have strived through organizational restructuring and reset their business directions resulting in substantial losses which undermined the Groups bottom line performance.
The company's directors have resolved to recommend the payment of a final dividend of HK$0.53 per share, which compares with HK$0.51 per share in FY2006. (Interim dividend in FY2007: HK$0.31 per share vs FY2006: HK$0.29 per share). The total dividend for the year amounts to HK$0.84 per share, an increase of 5.0% compared with HK$0.80 cents in FY2006.
